Enjoy the freedom of redundancy

When I was made redundant over five years ago, I was given a large cheque and the company threw a big farewell party for me that night in a swish bar. It was great. I went on to do much more interesting work which I would never have done if I hadn't been laid off.

"Being made redundant is so liberating... it's a bit like swimming naked," said a new ex-employee recently.

People now wax lyrical about the joys of being laid off.

"Redundancy makes people think outside the box, it breaks you free of where you are at, at the moment, and gives you the opportunity to have a complete review of everything," says Christchurch life coach Craig Galloway, who lost his job as a marketing manager years ago.

There is no shame in redundancy any more. In fact many people have been through it at some stage in their lives. No matter how good the economy, there are always headlines about companies laying off staff as they adjust to changes in their markets.

Air New Zealand and Fonterra have recently been taking steps to rationalise their businesses and this means showing the exit sign to a number of employees. Or, asking workers to re-apply for their jobs. Most businesses are looking at their staff numbers as we go into a more difficult economic climate.

"Redundancy is a fact of life. Organisations are in a constant state of change... If you look at it positively it can act as a catalyst... you can see what else is out there," says Richard Manthel, managing director of Robert Walter Recruitment Consultancy.

Financial adviser Lisa Dudson, who was made redundant from Gen-I in an earlier life, says: "Most people are going to get made redundant at some time in their life. Ten or 20 years ago it was horror, a big self-esteem issue, now it's 'oh well, join the club'."

The main thing when you are laid off is not to get dejected or take it personally. It is your position, not you, which has been deemed redundant, says life coach Andrea Molloy, who writes in her book Work Happy about turning redundancy into a positive thing. "It's not viewed unfavourably by companies when you put it on your CV," she adds.

The first step, says Manthel, is to find someone to talk to, whether it's your partner, a mentor or an outplacement service, a company where former employees are sent to make a new career plan.

Grafton Consulting director Reece Notton, who advises business people after redundancy, says he sees people who have been laid off three or four times in their career. "Some people say to me: 'I'm going to work for myself, nobody is ever going to make me redundant again'."

Notton says that if you are not actively managing your career, being laid off can be stressful. It can be the first time people learn about career management, he says.

"Be selfish," says Matt Chipper, organisational development national manager at recruitment firm Momentum, and think about what you want. You will go through a grief cycle but "as soon as you make it to the other side it can be a very positive thing".

Marketing manager Maddy Smith recently had an interesting experience. Her job was suddenly "dis-established" by her company, which realised a fortnight later, that the position was still vital and re-established it. In between times she had some time to think. "The first thing I thought was: 'Oh my god, I've got no job'. But then it makes you realise that work is not worth everything even if you put your heart and soul into it.

"Redundancy takes you out of your comfort zone. You look around and there are other things out there, maybe they pay less but who cares." Smith toyed with the idea of training for physiotherapy or nursing.

The 35-year-old admits she gave herself one day off to wallow.

"It was a Friday night. I drank a bottle of wine and got all upset but I got through all that quite quickly. Then on Saturday I wrote myself a list of companies that would make it on to my shortlist. Like the Heart Foundation, rather than just working for a company that is there to make money, choosing one that makes a difference."

Smith had been made redundant before. Two days after she finished at her previous company she had a new job, and the redundancy cheque paid for a nice car. So this time, she felt positive pretty quickly.

"You get better at it. It just took me a night before I thought, 'I am better than this'."

How you handle money at the time of redundancy is very important.

Notton brings in Murray Weatherston, a director of Financial Focus, when he thinks a client needs help on what to do with their lump sum.

"My first objective is to get people to think about their redundancy payment as a prepayment of salary," says Weatherston.

"They should put it into a bank account and pay themselves from it on a regular basis so that while they are... deciding about other work, they still have a regular cashflow. It is amazing to see how people lighten up once they realise they will be able to pay the rent (or the mortgage) for a period of time."

If you have been with a company for a while, you can get a reasonable sum of money from your pension.

Weatherston says there are three main things you can do with a big pension payout.

"One is to put it in another pension, pay off debt or buy a business for yourself... Repayment of debt is good for redundancy money because it redresses cash outflow going forward."

In other words, you can afford to take a more interesting job on a lower salary because you have fewer commitments.

The big thing, stresses Weatherston, is not to treat redundancy like a windfall that you must protect at all costs. "If you end up spending all the redundancy before your next job that is not bad if you are doing what you want to do," he says.

Your earnings post-redundancy can vary greatly depending on financial pressures and your life plan. But this doesn't matter as long as you are happy with the new path you have taken.

Barry Myers, 44, was made redundant two years ago. He now works as a finance consultant and runs his own gardening business. "The gardening was an important thing for me to do. Having been an accountant all my life I thought it was the only thing I could do to earn a dollar. I felt imprisoned by it.

"When I went out in the truck and got paid for gardening, it was a liberating thing. I felt that it was good exploration, and that I didn't necessarily have to be tied to accounting. I could be working in an outdoor shop, selling kayaks.

"The politics of the whole corporate experience can be dehumanising."

Know the facts

According to lawyers Hesketh Henry, employers must now include Employment Protection Provisions (EPP) in their contracts. An EPP sets out the process an employer must follow in negotiating with a new employer where it proposes to sell or transfer its business.

Fundamentally, an EPP aims to protect employees against wholesale redundancies. While ongoing employment is not guaranteed an EPP ensures that negotiating parties turn their minds to continuity of employment issues.

It is not mandatory in NZ for employers to pay compensation for redundancy. Entitlements are a matter of contract. By law, employers are entitled to conduct their business in the most profitable and efficient manner.

If that entails the disestablishment of jobs then the employer has that prerogative.

However, a termination for redundancy has to be substantively justified and conducted fairly.